Trends in the US Wine Industry for 2014 – Sunny Cellars with Some Cobwebs

The numbers for 2013 are in, and most experts are more optimistic about the 2014 wine market in the US. Though there are still some areas recovering less quickly from the recession (parts of the Midwest and some on-premise wine sales), in general “cellars are sunny but with a few lingering cobwebs.”

Following is a brief review of trends in the US wine market for 2014 and highlights of 2013. Sources include the Wine Marketing Council, Nielson,Silicon Valley Bank, Impact, Rabobank, Euromonitor, ShipCompliant, GuestMetrics, OIV, Wine Institute, Constellation Brands,Wine.com and Frederickson at the Unified Wine Symposium.

Wine Sales in the US in 2013

According to Impact Databank, US wine volume was 329 million cases in 2013, a 1% increase from 2012. This includes both domestic and imported wine, and makes the US the world’s largest wine market with France in second place at 313 million cases.

The estimated retail value of 2013 wine shipments is $36.3 billion, a 5% increase from 2012. This makes the US the largest wine market in terms of revenues.

Approximately 34% of sales were from imports, with California comprising 57%, and other states making up the remaining 9%.

Wine sales have been growing at a rate of 2 to 3% per year in the US market for the past 21 years.

US Wine Consumption Rates

The US is either the 1st or 2nd largest wine-consuming nation depending on the statistic source: OIV 2012 states the US consumes 29,000 hectoliters behind France (30, 269 hectoliters); whereas the Wine Institute (2011) states the US consumed 3,282,500 liters verses France at 2,891,700 liters.

Approximately 44% of all US adults drink wine, but only 35% per capita.

For per capita wine consumption, the US ranks #62 at approximately 11 liters per person or 3.08 gallons. The Vatican ranks #1.

Of the 330 million people in the US, 101 million now drink wine.

US Wine Consumer Demographic Trends

Of adult wine drinkers, 15% are High Frequency drinkers (consuming wine at least once a week or more) and 29% are Occasional drinkers.

In terms of gender, 55% of American wine consumers are women and 45% are men, with more men adopting wine over the last decade .

Babyboomers are still spending the most on wine, with Millennials (ages 21 to 36) in second place.

Major reasons Americans drink wine: 1) they enjoy the taste, 2) like to pair with food, 3) to socialize with friends, and 4) to relax.

The fastest growing varietals, with double digit growth, are still moscato, malbec and blends. Blends include red and white blends in both dry and sweet categories. Expect more growth and experimentation in this segment.

The sweet spot for wine pricing is $9 – $11.99, but Americans are trading up and spending more on wine.

People are interacting with wine much more on social media, with 80% of wine drinkers using Facebook; wine is the third most popular subject on Pinterest; and wine drinkers talk about wine online 63 times every minute. See Constellation’s great video with more statistics on this at: http://www.youtube.com/watch?v=wfxPR7XtBUE

Trends in Wine Channel Distribution

Approximately 80% of wine sold in the US is off-premise with 16% on-premise. Direct to Consumer (DTC) and Direct to Trade make up the remainder.

There are 7762 wineries in the US (Wine Business Monthly, 2014)

The number of retail outlets to sell wine has grown to 522, 420 (Nielson, 2014).

A very interesting and useful article. Thank you. The information is presented in a very clear and concise way which hides the fact that a lot of work must have gone into the research and preparation, so thanks again

Jiles, You are very perceptive. Yes, it took days of work to gather and compile all of this info. Thanks for recognizing this. Fortunately there are many wonderful people in the wine industry who help by sharing data at seminars and other sources.

“and wine drinkers talk about wine online 63 times every minute.”
This statistic makes no sense (not to mention literally impossible for individual drinkers to *talk* about wine (online) more than once a second) -or- the sentence is poorly worded.
Clarification?

Not sure why you don’t think it makes sense? Why can’t wine drinkers talk about wine online 63 times every minute — if you count all of the social networking platforms, and the more than 100 million wine drinkers in the US alone, 63 times per minute actually sounds low to me.

There are many up and coming wine regions, but it depends how you define them. Some are defined by popular vote on TripAdvisor, e.g. Sonoma County. Others are described by wine journals, e.g. Wine Spectator, and others may be determined by number of visitors and/or number of bottles sold. Currently the breakdown in the US for amount of wine sold by state is:

Hi Liz,
Thanks for this summary. Helpful, and I have a comment and question.
> Retail wine sales are compiled by Nielsen, not Nielson. Alternatively IRI.
> You mention a sweet spot of $9-12 / 750 ml, but what is the AVERAGE price of 750 ml equivalent? Not too many years ago, I was surprised to see it was only $6. While there has been inflation and consumer willingness to trade up, I would wager that it is below $9. Please share.
Thanks,
John / San Francisco

Thanks for your comments. The “sweet spot” data is for a 750ml equivalent. Yes, it was around $6 during the height of the recession, but up now due to improving economy. Actually, I just attended the Wine INdustry FInancial Symposium last week in Napa, and the latest from Nielsen is actually closer to $14 for the new sweet spot. Yes, Americans are finally trading up again.

Great article Liz, thanks. Could you please clarify something for me though. You state that “Within online wine sales, retailer to consumer is 5.9% of off-premise wine sales (Nielson, 2014)”. I’m not sure what you mean here…or what Nielson means. This seems to imply that, if off-premise wine sales is a part of retailer to consumer, then there must be an on-premise part to this, and of course this doesn’t make sense in the context of online wine sales. Do you know what the figure is for total retailer to consumer (US to US)? I’m assuming that retailer to consumer is part of Direct to Trade, is this correct?
Many thanks again.

Thanks for your question. It is a good one, because some of these stats can be confusing. The 5.9% was reported by Nielsen at the 2014 Wine Market Council Annual Consumer Research Conference, and is in reference to large off-premise retailers that use scan data and are starting to sell more wine online, such as Bev-Mo. The less than 2% of total online wine sales came from Mike Osborne of Wine.Com at the same conference, and was more in reference to the total figure across the US in terms of all online wine sales at this point.

You have put your finger on how challenging it can be to gather all of the data, because it is difficult to track if it is not part of scan data. I think the key point is that the figure is still quite low, but it is growing at double digit rates. See my recent article on the topic at: http://www.winespectator.com/webfeature/show/id/50816

Liz, this is really great. Thanks for the time you put into this. Are you aware of any demographic information for people that collect wine?? I can find info on club membership growth, etc but not number or growth in those that collect or “who” collects. Looking forward to your 2014 info.

Will,
I think it is worth pointing out, because perhaps Liz is too modest to say so, that the Master of Wine qualification is, in my opinion, the most difficult to obtain, the most comprehensive and the most prestigious wine qualification in the world, bar none! I believe that there are only about 300 people in the entire world who have achieved this